UNILATERAL DECISIONS TO VARY ORDERS WILL LEAD TO TROUBLE AND AMOUNT TO CONTEMPT: PARATUS AMC EXAMINED

Mediatelegal

The case of Paratus AMC Ltd -v- Lewis [2014] EWHC 1577 (Ch) has been placed on Bailli following an order by the judge to highlight an issue of contempt of court. As such it clearly requires wider publication. It also contains important lessons about compliance. 

THE FACTS

The claimant was ordered to pay £181,461.46, into court, representing the balance due after the sale of a property. After the order was made the claimant realised that it had a contractual right to deduct other sums from the proceeds.  It deducted  a sum (incorrectly calculated) and paid a lower sum than £181,461.46 ordered into court.  The claimant then ignored a further order that whole sum be paid into court prior to an application to vary – an application that had been made some time after the date the sum should have been paid into court.

THE JUDGE’S FINDINGS

The claimant’s course of action did not find favour with Mr Justice Sales – to say the least.  The claimant  had made a  unilateral decision to vary the amount paid into court, without making an application,

  1. Paratus, however, did not comply with his order. I am told that on about 13th March it paid into court only the sum of £168,726.66. Apparently, that was done at a time when it had come to be appreciated that the further costs that I have referred to had not been brought into account. But it should be noted that, even if they were brought into account, the sum to be paid into court should have been £4,281 higher than the sum that actually was paid into court by Paratus.
  1. Since Paratus was subject to an order of the court and had not made any application at that time to vary the order that had been made against them (let alone made an application which had been granted), Paratus had no proper justification for failing to pay into court the full sum of £181,461.46 that it was ordered to pay in by Mr Justice Norris. The appropriate course for it should have been either to apply for a variation of his order in good time before it came into effect or, having failed to do that, to pay the sum it had been ordered to pay into court and then to apply back to the court for a variation of his order and a payment out of part of that sum back to it. It did neither of these things. Instead, it took it upon itself, in breach of the order and in contempt of court, to pay the lesser sum of £168,726.66 into court. As I have indicated, even on Paratus’s own arithmetic and correcting for the mistakes which had been made, that sum was inadequate.
  1. Mr Lewis came before this court on 10th April to point out that although by that stage Paratus had issued the present application notice dated 9th April 2014 seeking a variation of Mr Justice Norris’s order, it had not complied with that order. Mr Lewis applied to me sitting in the interim applications court and, even though notice had not been given to Paratus, it appeared to me, as it still does, that he had an unanswerable point that Paratus was in breach of the order of Mr Justice Norris by having failed to pay the proper sum ordered by him into court. Accordingly, on 10th April I issued a further order requiring Paratus to comply with the relevant part of Mr Justice Norris’s order by paying the balance of £12,734.80 into court forthwith, i.e. in advance of the hearing of its own application notice.
  1. Paratus breached that order as well. It failed to pay the sum required into court. Instead, it has proceeded to bring forward its application notice of 9th April 2014, supported by a witness statement of Samantha Edge, a paralegal in the employment of Moore Blatch LLP, the solicitors for Paratus. Miss Edge does not offer any apology or explanation for the contempt of court by Paratus in failing to comply with the order of Mr Justice Norris of 24th February 2014 and my further order of 10th April 2014.
  1. The court deprecates the blasé attitude demonstrated by Moore Blatch LLP and Paratus in relation to ignoring two binding orders of the court made against Paratus. It is not for an individual litigant, even if convinced that the court has made a mistake, simply to ignore repeated orders of the court that they should do a particular thing, as Paratus was ordered to pay the full required sum into court. I am bound to say that I find it very surprising indeed that no one on behalf of Moore Blatch LLP thought it appropriate even to apologise to the court for the repeated breaches of court orders by Paratus through the agency of Moore Blatch LLP.”

THE RESULT

The claimant had been ordered to pay the unpaid balance into court prior to the hearing and had failed to do so. The court ordered that the properly calculated balance must be paid into court and that the claimant should pay the defendant’s costs.  However the judge clearly felt that publicity of the errors was important.  In the course of submissions about costs and subsequent orders he observed:

  1. Paratus had acted in repeated contempt of court in the way that I have described in my ruling and I consider that Mr Lewis was fully entitled in the circumstances to come to court to contest Paratus’s application on that basis. In substantial part, Mr Lewis was successful in his contentions, in that he has demonstrated that Paratus has acted in contempt of court and acted without promptitude in seeking to rectify its previous mistake. In my judgment, the just and appropriate order in the circumstances is that Paratus should be ordered to pay the element of costs I have indicated under a pro bono costs order.
  1. The second application that Mr Lewison makes is that the court should order that a transcript of the ruling should be prepared at Paratus’s expense and published on the BAILII website. I consider that it is appropriate to include this provision in the order. Paratus has acted in contempt of court. Although at the end of the day I thought it right to vary the order made by Mr Justice Norris on the application made to me by Paratus, I consider that Paratus’s clear and repeated contempt of court should attract proper sanction in the form of publicity for what it and Moore Blatch LLP have done and how they have treated the orders made by the court. It seems to me that the appropriate way to do that is by giving publicity to the ruling of the court on this occasion, which exposes their serious failures to respect the orders made by the court against them. Accordingly, I consider that it is appropriate to include this in the order which is made.

THE LESSONS

The judge was wholly clear in his attitude to the conduct by the claimant

  • “The court deprecates the blasé attitude.”
  • “It is not for an individual litigant … simply to ignore repeated orders of the court that they should do a particular thing.”

THE CORRECT COURSE OF ACTION

The judgment gives the course of action that the claimant should have taken:

  • Made an application to vary ahead of the date for compliance.
  • Paid the correct amount into court.

In any event unilateral decisions not to comply with orders to pay sums into court are hardly likely to be looked at kindly.